Correlation Between Integrated Micro and AgriNurture
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and AgriNurture at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Integrated Micro and AgriNurture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and AgriNurture, you can compare the effects of market volatilities on Integrated Micro and AgriNurture and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Integrated Micro with a short position of AgriNurture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and AgriNurture.
Diversification Opportunities for Integrated Micro and AgriNurture
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Integrated and AgriNurture is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and AgriNurture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriNurture and Integrated Micro is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Integrated Micro Electronics are associated (or correlated) with AgriNurture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriNurture has no effect on the direction of Integrated Micro i.e., Integrated Micro and AgriNurture go up and down completely randomly.
Pair Corralation between Integrated Micro and AgriNurture
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to generate 1.19 times more return on investment than AgriNurture. However, Integrated Micro is 1.19 times more volatile than AgriNurture. It trades about 0.05 of its potential returns per unit of risk. AgriNurture is currently generating about -0.02 per unit of risk. If you would invest 155.00 in Integrated Micro Electronics on October 20, 2024 and sell it today you would earn a total of 3.00 from holding Integrated Micro Electronics or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Micro Electronics vs. AgriNurture
Performance |
| Timeline |
| Integrated Micro Ele |
| AgriNurture |
Integrated Micro and AgriNurture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and AgriNurture
The main advantage of trading using opposite Integrated Micro and AgriNurture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, AgriNurture can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AgriNurture will offset losses from the drop in AgriNurture's long position.| Integrated Micro vs. Atlas Consolidated Mining | Integrated Micro vs. Transpacific Broadband Group | Integrated Micro vs. National Reinsurance | Integrated Micro vs. Top Frontier Investment |
| AgriNurture vs. Atlas Consolidated Mining | AgriNurture vs. Top Frontier Investment | AgriNurture vs. Manila Mining Corp | AgriNurture vs. Integrated Micro Electronics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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